Cautious Managed Fund

As with any investment, your capital is at risk.

Iain McCombie (IM): 
We are launching Cautious Managed as a natural evolution of our longstanding Managed Fund. A one-stop shop to the best ideas at Baillie Gifford for clients who require a more balanced portfolio. Launched in 1987, the Managed Fund’s philosophy hasn't changed. Keep it simple, stay consistent to our process and let long-term compounding do the heavy lifting. Now we're applying the same proven process to Cautious Managed. It's the same underlying investments, just a different asset allocation. Fifty per cent equities, 45 per cent bonds and 5 per cent cash to help smooth drawdowns.

Steven Hay (SH):
We know that some of our clients want a smoother path to compounding returns, but without changing how we invest. We've listened to that feedback, and we believe Cautious Managed can build upon the success of the Managed Fund. Our disciplined approach has carried us through a number of market cycles and crashes, and you will see periods of both over and under performance in the short run, but our edge is to stay patient, ignore the noise and let returns compound over the long term, where our record is excellent. If you like how Managed compounds over time, then Cautious Managed is the gentler ride for clients who want that same team and process, but with less equity beta.

IM: 
What is important is clients are getting the same people, process and expertise that have powered the Managed Fund for decades. The only change is the starting asset mix, dialling down equities and dialling up fixed income. Cautious Managed has 50 per cent in equities versus 75 per cent in Managed. The underlying portfolio of equities remains the same in both funds, providing bottom-up active growth as you'd expect from Baillie Gifford and the Managed Fund. Cautious Managed has exposure to the best ideas across Baillie Gifford from the underlying regional teams. Whether that's TSMC in emerging markets, Amazon in the US, or M&S closer to home.

SH: 
Equities are balanced by fixed income. We run a global best ideas portfolio across both corporate bonds and developed and emerging sovereign bonds. Within sovereign bonds, the biggest opportunities are found by identifying the longer-term path countries are on. We set our currency and interest rate views through regular macro debates that weigh up an economy's structural path against cyclical forces. For corporate bonds, resilience is underappreciated as a driver of long-term returns. Therefore, every investment is supported by forward-looking research to uncover a company's long-term prospects. This focus gives us the confidence to invest with patience and conviction as we seek to add value through bottom-up bond selection, much like our equity colleagues. The average credit rating is BBB, made up of bonds from companies such as Mitchells & Butlers and from Brisbane Airport. Just like Managed, oversight of the fund is still maintained by our Policy Setting Group, which meets quarterly to decide the balance between equities, bonds and cash, prioritising bottom-up enthusiasm over top-down market timing. All of this takes place under one roof in Edinburgh, with face-to-face discussions between Iain, myself and the wider team.

IM: 
Cautious Managed sits in the Investment Association (IA) Mixed 20-60 per cent Shares and is designed as a core holding for risk-aware clients, ideal for mid-range risk profiles and it's deliberately broad, 200-plus equity holdings across the UK, US, Europe, developed Asia and emerging markets. Balanced by our global bond sleeve and a small cash reserve, providing clients with a truly diversified proposition. Actively managed, it's a one-stop shop of the best ideas across Baillie Gifford. Now we know fees are an important consideration for clients, and the Managed Fund has always been one of the lowest cost funds in the sector. Cautious Managed will be exactly the same. And even better, for the first three years, B-class shares will have an attractive fee discount of 30 per cent on the annual management charge. This means you will pay an annual management charge of 0.28 per cent, with the total ongoing charge currently equating to 0.32 per cent. We are very excited to launch Cautious Managed that builds on the legacy of our Managed Fund. We think now is a great time to invest.

Important information and risk factors    

This recording was produced and approved in January 2026 and has not been updated subsequently. It represents views held at the time and may not reflect current thinking. 
The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions. 

This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, and Baillie Gifford and its staff may have dealt in the investments concerned. 

Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford & Co Limited is an Authorised Corporate Director of OEICs. Investment markets can go down as well as up and market conditions can change rapidly. 

The value of an investment in the Fund, and any income from it, can fall as well as rise and investors may not get back the amount invested. 

The Fund’s share price can be volatile due to movements in the prices of the underlying holdings and the basis on which the Fund is priced. 

Bonds issued by companies and governments may be adversely affected by changes in interest rates, expectations of inflation and a decline in the creditworthiness of the bond issuer. The issuers of bonds in which the Fund invests, particularly in emerging markets, may not be able to pay the bond income as promised or could fail to repay the capital amount.

The Fund has exposure to foreign currencies and changes in the rates of exchange will cause the value of any investment, and income from it, to fall as well as rise and you may not get back the amount invested.

The Fund invests in emerging markets where difficulties in trading could arise, resulting in a negative impact on the value of your investment.

Further details of the risks associated with investing in the Fund can be found in the Key Investor Information Document or the Prospectus, copies of which are available at bailliegifford.com.